The budget is an essential part of the national economic system of most states. Each country seeks to build the most effective model for managing the corresponding resource, as well as identify promising ways to improve it. What is the specificity of the Russian model of building budget policy? What functions does the Russian state perform in this area of activity?
What is a budget?
Before studying the functions of the budget, we consider the approaches to the definition of this term that are popular among Russian researchers. So, in article 6 of the RF BC, it is said that the term under consideration should be understood as a form of education, as well as the expenditure of financial resources that are designed to support the tasks of the state and municipal government.
Budget structure
The contents of the budget has a very simple structure - these are expenses and revenues. However, defining their specific articles is a daunting task. There are key functions of budget revenues, as well as government spending financial resource management systems. Regarding the first, it is necessary to single out, first of all, the formation of the necessary cash reserves placed in the state treasury. By charging taxes and various fees, the country's authorities thereby form a certain source of financial resources, which can subsequently be used as an instrument for solving the most important social problems. As for the key functions of budget expenditures, it is quite acceptable to include ensuring the necessary demand in the economy, as well as a high level of purchasing power of citizens. A little later we will study the specifics of such activities in more detail.
According to modern researchers, the budget can rightfully be considered one of the leading links in the state’s economy. It combines the income and expenses of the country, ensures the unity of financial management of strategically important industries, and allows the state to mobilize certain economic resources. Some researchers prefer to consider the budget as monetary relations that arise between the state, citizens and legal entities. Subject of Related Communications - Use budget funds which is directed by the authorities to finance key sectors of the country's economy. Citizens and legal entities contribute to better investment of public financial resources.
The term “budget” is most often considered in the context of state and municipal activities. But in some cases it is also used as an economic characteristic of the activities of private enterprises. Along with the term “budget”, the concept of planning is widespread in business, which also involves the definition of various items of income and expenses - but in this case at the level of an individual organization.
So, under the budget can be understood:
- fund of financial resources, which is at the disposal of the state;
- A financial document that allows you to effectively distribute the income and expenses of an enterprise, region or country.
There are quite a few approaches to defining budget functions. Consider those that are characterized by widespread among Russian researchers. So, among the popular concepts is the classification of budget functions into distribution and control. We will study them in more detail.
Distribution and control functions of the state budget
The distribution function of the budget involves the implementation of activities by the state in the concentration of financial resources and their subsequent direction in the field of solving certain socially significant problems. The main type of state activity in this part is the identification of priority areas of investment in relation to a specific territory, economic sphere, and social group.
The specificity of the control function of the budget is in the state’s implementation of monitoring the implementation of decisions made when developing strategies for investing in the national economy. These activities allow us to evaluate the effectiveness of the financial model used by the authorities. Thanks to the control function of the budget, the state can also forecast the socio-economic processes that accompany investment in certain economic spheres.
In order to solve the problems in question, the country's authorities must implement a mechanism that includes:
- forms of budget management;
- methods of collecting taxes and leveraging other resources that provide budget revenue;
- algorithms for the efficient distribution of relevant cash.
The work of the budget mechanism involves the formation of the state a special system of political institutions - management, law, banking institutions.
Scheduling function
Consider other critical budget functions that Russian researchers highlight. Among these are planning. This function primarily involves the development of programs related to budget development. Subsequent work with the main financial plan of the state is mainly related to the refinement of the items that are included in the corresponding algorithms. The considered function is one of the factors of the country's budget stability. Its high-quality implementation determines how effective the collection of financial resources in the state treasury will be, as well as their spending.
Coordination function
If we further consider the main functions of the state budget, it will be useful to pay attention to coordination. The main task that the authorities are solving in the framework of this area of activity is the competent delegation of authority related to the management of the financial system of the state, as well as the construction of the necessary mechanisms for controlling the activities of facilities that have the appropriate authority.
Incentive function
Another noteworthy budget feature is incentive. Its specificity lies in the formation by the state and the institutions created by it of an environment conducive to the development of certain participants in social communications. These may be: authorities, NPOs, commercial enterprises, individuals.
Each of the noted subjects is called upon to fulfill a certain social role. The task of stimulating such activities is also entrusted to the state, namely, to its budget system. This regularity is especially relevant for the Russian social environment. The fact is that a significant part of the citizens of the Russian Federation work in the budget. The state owns a significant share of businesses. The largest Russian banks are state-owned. Despite the fact that often the specifics of the functioning of various organizations imply self-sufficiency, a significant amount of budget funds can be allocated if necessary. Or those that could potentially be included in it, but then their investment in a particular segment of the business, and not production, becomes a priority.
Thus, if we consider the most significant functions of the state budget from the point of view of the development of the national economy, then in the case of the Russian economy, one of those will be stimulating.
Educational function of the state budget
Another important area of activity of authorities in developing a strategy for managing national financial resources is training. According to some researchers, the corresponding function is important from the point of view of forming sources of knowledge at the level of various state institutions, as well as the necessary human resources for solving problems related to the economic development of the state.
The country's authorities should not invest in certain areas of economic development without calculating the subsequent economic effect of the corresponding investments. It can be expressed not only in ensuring self-sufficiency by state organizations, but also in the formation at the level of social institutions of resources accumulating managerial experience. Which, in turn, can be involved by the authorities in solving urgent economic problems.
The social role of the state budget
So, we examined the essence and functions of the state budget. It will now be useful to study a category quite close to them - the role of the national financial resources management system for society.
By distributing financial resources, the government solves the most important social problems. The budget is one of the key instruments of the state’s influence on the national economy, society, and the development of various institutions. Therefore, its approval, determination of key revenues and expenses involves the organization of multi-stage hearings, the implementation of legislative initiatives at the highest echelons of power.
As we noted above, many functions of the budget of the Russian Federation - for example, stimulating - directly determine the effectiveness of the economic development of the state. This area of activity is closely related to one of the key roles of the corresponding public finance management system - ensuring a high standard of living for citizens. People living in the country, first of all, expect from the authorities an adequate economic policy, which will be accompanied by the opening of opportunities for career growth, doing business, self-realization in the aspect of certain professions. This social role of the budget comes down not only to the financing of relevant initiatives. Public finance can be, for example, a factor in the formation of demand in certain business segments. That is, the main buyers of a product or service offered by a private company may be employees of the public sector, or the state represented by any government bodies.
Budget as a factor of sovereignty
So, we have studied what the social function of the budget is. It will be important to consider another significant area of state activity in the framework of managing national financial resources. It is about ensuring the sovereignty of the country. This concept can be understood in many ways. But in the general case, the term "sovereignty" means the independence of the state as a political entity in the international arena.
The corresponding status should be supported by the sustainability of key social institutions, the economy, and the country's army. The costs of maintaining their development are largely borne by the state. The transfer of such functions to private hands, according to researchers, does not always have a positive effect on ensuring the sustainability of a country's sovereignty. In this regard, the functions of budget expenditures in terms of ensuring an efficient economy, the formation of a powerful army and efficient social institutions are among the most important. Their successful implementation becomes a key factor in ensuring sovereignty.
Functions of regional and local budgets
Having examined the contents and functions of the budget, we can study how those social problems, which we mentioned above, are solved at the local level in those states where political division involves the appropriate structuring of the national financial system. Such countries include, of course, Russia. The budget of our country is presented at three levels - federal, regional, as well as municipal.
In fact, the key tasks of public finance management are, on the whole, the same at all the steps noted. The functions of the federal budget that we examined above are generally implemented in the same spectrum and at other levels of the work of political institutions. However, in a particular area of the budget, certain areas of activity may be given a special priority. What are the most characteristic functions of local budgets of the Russian Federation, as well as regional public finance management systems?
First of all, it is ensuring high incomes of citizens living in a particular region, in comparison with residents of other subjects of the Russian Federation. It is known that in Russia there are regions whose level of economic development is low. The task of local and regional authorities is to launch mechanisms to stimulate the growth of relevant economic systems.
Another significant function of local and regional authorities is to create conditions for self-development of citizens in the aspect of entrepreneurial, creative, socio-political activities. A person living in a particular region should have the same rights as a citizen of another subject of the Russian Federation or city, as well as comparable opportunities for personal development.
Another significant function of regional and local budgets is the formation of a sustainable economic cluster in one territory or another in which local business entities and state enterprises can effectively integrate into the national economy.
So, we examined the main types, functions of the budget on the example of the corresponding system of sovereign finance management in Russia. Of course, the approaches to building a national budget model in Russia due to the fact that our state is relatively young, in many respects require improvement. However, according to many analysts, the current model of managing the budget of the Russian Federation as a whole optimally reflects the national, cultural and economic specifics of the development of the state.
